FHA 203K Loans in NC

FHA 203K loans are perfect for those of us who fall in love with a great house that has this Gosh Awful Shag Carpet! This carpet would give you a headache! How can you buy the house if you don’t have an extra $5000 to update that 1970’s carpet, green countertops, and linoleum?

If the property is under the FHA loan limit in your county, you can purchase it with a FHA 203K loan.

Let’s say you negotiate a sales price of $100,000. With a traditional FHA mortgage loan, you would need to put 3.5% of the $100,000 into the down payment.

With this special FHA 203k Renovation mortgage program, designed for REHABS, you can add up to $35,000 for “updates.” This means that if you negotiate a price of $100,000 and you need an additional $5000 for the updates… we base the 3.5% down payment on $105,000!

It’s a GREAT program for folks who need to update a property! The main things to remember about the FHA 203K loans in NC are:

You can add a minimum of $1000 to the purchase price for improvements, including appliances.

You can not change the “footprint” of the house.

You can not borrow more than $35,000 for improvements.

The property must appraise for the improvements plus the purchase price, or “after improvement” value.

Qualifying is the same as with traditional FHA loans, so you need to have at least 2 credit scores above 660.

Any repair or improvement requiring a work schedule longer than three (3) months; or Rehabilitation activities that require more than two (2) draws/payments.

Any work requiring a plan reviewer

Result in work not starting within 30 days after loan closing; or cause the borrower to be displaced from the property for more than 30 days during the time the rehabilitation work is being conducted (FHA anticipates that, in a typical case, the borrower would be able to occupy the property after the mortgage closing.

About Eleanor Thorne

I see myself differently than most loan officers in the Cary/Raleigh market. As a rare Cary native, I see myself as an expert on the area, on mortgage industry changes & factors that effect rates! I’ve lived in Cary since 1968 – and I’m second generation “mortgage.” I work with my husband, Steve Thorne Mortgage Loan Originator #60596 Equal Housing Lender

Comments

Too few people are aware of this product, particularly with the abundance of bank-owned properties out there. Many of these can be bought for a reasonable price, but need some TLC. The FHA 203k is the perfect product for such properties.